How 2020 changed the way auto shops do business
What a difference two years can make.
Climbing out of the global pandemic has riddled the automotive repair industry with challenges ranging from supply chain disruptions to a supercharged focus on a burgeoning electric vehicle industry.
Independent repair shops are doing their best to service the ever-changing needs of their local communities, while still looking to grow and evolve.
As the industry moves towards an electric future, independent repair shops are faced with a renewed set of challenges in 2023. The last year has proven that staying relevant with a positive online presence is as critical as staying on top of industry trends. Falling behind could spell the end for small, independent shops.
Here’s what we learned in 2022 and a look at what’s in store for 2023.
Free Guide: How To Overcome Top Challenges For Auto Shop Owners in 2023
1. Electric vehicles are more than just a trend
Let’s run through some numbers here. According to the IEA, 120,000 electric vehicles (EVs) were sold worldwide back in 2012. By 2021, that number rose to a staggering 6.9 million.
In 2022, electric vehicles crept to over 10% of the total market share, making 2022 the biggest year for the number of electric vehicles sold. Regulators and manufacturers are pushing for EV market share rates of over 40% by 2030.
Thanks to everything from increasingly stringent emissions regulations around the globe to meaningful increases in range technology and lower prices, electric vehicles are here to stay.
This can present a challenge for independent repair shops as most are not equipped to service EV cars, trucks and SUVs due to the advanced diagnostics required for these all-electric machines.
Since ICE (internal combustion engine) vehicles still make up the vast majority of vehicles on the road, there is still plenty of business out there. Still, it would be a disservice to your business if you ignored the trends.
Shops must familiarize themselves with hybrid vehicles, which combine traditional gas-powered engines with battery propulsion. Many experts see hybrids as the bridge between standard gas-powered vehicles and all-electric vehicles and a viable opportunity for serious profitability.
2. Consumers are turning to dealerships for repairs
In 2021, a survey by Cox Automotive indicated that 55% of consumers take their vehicle to the dealership because they believe the dealership knows the vehicle better than independent repair garages. Despite this, consumer satisfaction with dealership service has not risen but, in fact, has declined.
Ask any independent repair shop owner, and they’ll tell you they are perfectly qualified to work on a range of vehicles. Independent repair shops need to properly market themselves, build a solid reputation and understand their core market to convince customers that they don’t need to go to a dealership for specialized maintenance services and repairs.
Issues like supply chain blocks and a shortage of qualified technicians plague the world of dealerships in the same way as independent repair shops, so success for an independent repair shop will come down to how well they position themselves as independent experts.
Many brands like Subaru, Honda and Volkswagen have a wealth of independent shops that service these more unique vehicles, and that trend should only grow into other brands as well.
3. Vehicles are becoming more reliable
Most new vehicles are more reliable thanks to advancements in manufacturing technology. They also require less overall maintenance due to long-running synthetic oils, longer tune-up intervals and more.
Although this is a serious benefit for consumers, independent auto repair shops may generate less revenue from auto repair services moving into 2023. Auto parts retailers are also feeling the pinch of more reliable vehicles. This may seem like a challenge for independent automotive repair shops, but there is a silver lining here for shops keen to take advantage.
Dedicated, consistent maintenance performed on the manufacturer’s schedule is part of what makes new vehicles reliable. Shops that increase their reputation and online presence can insert themselves as a dealership alternative.
Offering specific expertise in a vehicle type or brand and a more local, friendly environment can go miles towards bringing in high-revenue customers to local shops.
4. Growth opportunities exist in tire, glass and body
Despite the fears that electric vehicles may cause for traditional shops that work on ICE vehicles, 2022 showed considerable opportunity in other sectors. Rather than remain stagnant, many traditional automotive repair shops have started to transition into tire, glass and bodywork to fulfill consumer demand.
No matter what’s under the hood, all vehicles on the road need new tires, replaced windshields and auto body repairs. Many shops avoid these markets due to specialized equipment such as tire balancers or ADAS (advanced driver-assistance system) equipment, difficult OEM (original equipment manufacturer) procedures and the lack of skilled labor.
However, relying on oil change revenue may not cut it as we move through the 2020s. The fact remains that traditional repair shops that can make the transition into tire, glass and bodywork can take advantage of a sector that is set to grow in the coming years to the tune of $214 billion in global annual sales by 2026.
5. Skilled labor shortage continues
There are many reasons why skilled workers are in short supply throughout the automotive industry, including low worker pay and a lack of defined career direction. To compete, dealerships and independent shops alike must find ways to attract automotive technician talent and retain it in a changing economic environment.
This is one of the most exciting times to consider a career in the automotive repair industry. Electric car adoption rates and ever-increasing standard equipment such as telematics, autonomous driving technology and onboard entertainment options on new vehicles mean that the automotive sector will remain an in-demand place for talented workers to build careers.
Many independent shops are forming partnerships with local community colleges and other organizations to take advantage of new talent. Independent shops have a unique opportunity to provide jobs for new techs and careers with real growth potential.
How to compete in 2023
Many people looking to enter the automotive repair industry moving into 2023 will ask the question: How profitable are auto repair shops? Although challenging, the automotive repair space is poised for huge changes in the coming years.
To grow through 2023 and beyond, independent shop owners need to embrace emerging technologies, explore new avenues and position themselves as a place where talent can grow and thrive.
On top of the specific issues that uniquely apply to the automotive space, independent shop owners must also tackle an ever-changing business climate that puts an increased focus on reputation and online presence.
These growing pains can be challenging, but you don’t have to do it alone. Broadly is an easy-to-use, streamlined platform. It enables you to combine automotive reputation management with a comprehensive auto repair marketing solution with social media integration, web chat and much more.
You’ll get more reviews, be able to quickly respond to them and get more customers. We’ve designed our product to work alongside your existing auto shop management system.
Running an automotive repair business is enough pressure – let Broadly take some of the shop management burdens off your shoulders.
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